After fourteen years on Commercial Drive, I’m sad to report that Magpie, the renowned magazine and book store, is closing at the end of April.

It was, of course, not an easy decision for me as the owner to make. Most of my regret is for the hole it will leave in the middle of this wonderful community. But a number of converging factors took the decision out of my hands.

Those factors begin, I believe, with the internet. The past Christmas shopping season was, according to The Wall Street Journal, the first time online purchasing showed up as a noticeable effect on sales at so-called “bricks and mortar” retailers. In addition to online sales, the internet has also noticeably infringed on people’s time and activities. Where not so long ago a local café would be filled with people reading magazines, newspapers and books, today wireless-connected laptop computers proliferate.

It’s part of a wider behavioral sea change. New personal technology now accounts for why, on a city bus, for example, where one was accustomed to finding people with their eyes buried in books or newspapers, instead we find them blankly staring off into space while their ears are plugged up with ipods. These mass behavioral changes have real-world effects, in Magpie’s case, the effects being predictable enough: steadily declining sales of books and magazines.

While the internet is a global phenomenon, there are national aspects to the closure of Magpie as well. StatsCan reported last month that the proportion of income Canadians devote to housing had reached an all-time high of 42%, and that in Vancouver, that proportion was even significantly higher. At the same time, gasoline prices have doubled in the last 18 months and food prices are beginning to rise quickly. The amount of income taken up by those necessities leaves little left for non-necessities like books and magazines even in a booming economy.

The local economy in Vancouver does indeed seem to be booming. But particularly around Commercial Drive, it was hammered more than has been acknowledged by the recent Hollywood writers’ strike. A significant proportion of Vancouver’s labour force is employed directly or indirectly in the film and TV production industries, and probably something like 50% of the labour force around Commercial Drive is. That lengthy strike shut down operations for all film and TV workers. The looming threat of an even lengthier actors’ strike has ensured that none of those back to work can feel secure about spending money again.

Magpie itself had developed intractable business problems. Around 2000, after operating for six years and arriving, as expected, at a time to re-capitalize, the unexpected arrival on the scene of Chapters Bookstores, with its predatory schemes—successfully executed—to wipe out most independent bookstores, made it suddenly impossible for any remaining bookstores to negotiate ordinary business re-capitalization loans at banks. The only financing available was through credit cards. Rather than close after six years, I made the choice to take credit card money, the crack of financial markets.

Since then, the amount the store has paid in interest rates on credit cards is equal to almost two times the capital borrowed against them. Credit card interest rates, though at a period of historically very low Bank of Canada overnight borrowing rates, were such that Magpie had in seven years paid the borrowed capital back twice over and yet still owed the total amount again. Pleas for lower more reasonable rates fell on coldly deaf ears.

In addition, the industry the store depended on, the wholesale distribution industry, had changed dramatically. Where once the store had magazine supply contracts with up to 42 wholesale distributors, today only three remain after a serious round of mergers, takeovers, consolidations and collapses.

The effect of industry consolidation was to reduce competition. The way so many wholesalers competed with each other was to offer good terms and lengthy lists of titles including many low-circulation, specialized magazines. After consolidation, the remaining wholesalers learned to respect each other’s turf, reducing competition more. They tightened up terms with retailers considerably. And they reduced their lists of titles by expelling the kind of low-circulation specialty magazines Magpie thrived on. Just as supply of these types of magazines became harder, demand dropped as well, as particularly those readers who sought out specialized content were among the first to discover the internet as a source.

Magpie responded by expanding into quality remaindered books under the genius direction of new manager Chad Christie. Though the plan worked for a few years to turn the store around, it required another round of credit card borrowing. The turnaround proved ultimately incapable of overcoming fast enough all the past and present pressures.

The entire newspaper and magazine industries are on their knees around the world due to many of the same pressures that brought Magpie to a close, most notably the arrival of Craigslist which has decimated newspapers’ traditional cash cow, classified advertising. There was nothing the store could have done to resist the tide of the whole periodical world. But there are things the periodical industry could have done had they perceived the changes in time and had they imagined solutions that were available.

For example, it is well-known in the magazine and newspaper businesses that the proceeds from sales of single copies at stores have never more than covered the accounting, collections, distribution and wasted copies costs of supplying stores. The only benefit to publishers of single copy sales in stores has always been the chance to attract new subscribers. The real business of periodicals is in advertising, a business that requires eyeballs at almost any cost.

Publishers could have perceived the same changes already sweeping the digital music business and switched their way of doing business by offering stores directly-shipped free copies of their products, sill with a cover price, with the stores responsible for paying for shipping only. The result for publishers would have been the same neutral cost they already accept by employing the lecherous distribution industry, but they would have helped create many more flourishing stores happy to make space to push sales of what would then be very high profit margin products. I wrote an article seven years ago for the leading magazine-industry magazine explaining this solution. The article was rejected. That magazine itself went out of business the following year due to the same pressures.

I am sad to be closing Magpie, but I’m very happy to have operated so long on this wonderful street bringing to residents of my community such a wide array of interesting magazines and good books. It was always a delight, and it remains one now.

We are having a sale of remaining inventory till the 27th of April to help raise money to partly pay remaining bills, so come quickly to pick over the best stuff. And we could use some help in clearing out the premises near the end of the month if you’re inclined to volunteer. I might be having a hard time carrying out what I brought in fourteen short and incredibly interesting years ago.